Telecom Infrastructure Crucial for Mobile Money Platforms in Solomon Islands
As mobile penetration rates continue to soar in the Solomon Islands, the country’s financial infrastructure has been forced to adapt to meet the growing demand for digital payment solutions. With limited access to traditional banking services, telecom infrastructure plays a vital role in enabling mobile money platforms, which have become ubiquitous in the economy.
Challenges in Financial Infrastructure
The Solomon Islands’ financial infrastructure is characterized by limited commercial bank branches and ATMs outside of Honiara, the capital city. Only 15 bank branches are spread across the country, with seven agency banking terminals located in rural provinces. The lack of formal banking infrastructure outside of Honiara poses a significant challenge for individuals and businesses residing in remote areas.
Digital Banking Platforms
The country’s four commercial banks - Bred, Pan Oceanic Bank (POB), Bank of South Pacific (BSP), and Australia and New Zealand Banking Group Limited (ANZ) - offer online and mobile banking platforms, enabling customers to access their accounts, make transfers, pay bills, and conduct various banking activities through the Internet or mobile applications.
Manual Payment Clearing
However, interbank payment clearing in the Solomon Islands is still done manually, which can take two to three days to settle, leading to payment delays. The country is expected to launch an Automated Clearing House (ACH) system in the fourth quarter of 2023, which will enable faster inter-bank payments and lay the foundation for real-time payments.
Mobile Money Wallets
Mobile money wallets are also gaining popularity in the Solomon Islands, with three mobile money solutions available - Ezi Pei, Iumi Cash, and M-Selen. As of July 2023, there were about 13,400 mobile wallet accounts in the country, with only 10-15% actively used. The launch of the new M-Selen product is expected to increase the penetration and usage of mobile wallets, driven by domestic transfers from Honiara to rural areas.
Growth Prospects
The Solomon Islands’ financial sector is poised for growth, with the introduction of digital payment solutions and the development of telecom infrastructure playing a crucial role in driving this growth. The country’s financial infrastructure is expected to become more efficient and accessible, enabling individuals and businesses to access financial services and participate in the economy.
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